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Publish Date : 02-Feb-2016

The Defence Procurement Policy 2016 (DPP) introduced by Defence Minister Manohar Parrikar has predictably generated much commentary and as is always the case when a new policy is unveiled by the government - some debate as well.

The consensus is that the new DPP will extensively address the issues that have affected defence procurement and acquisition over the years.

Moreover, it is expected to finally provide a much needed boost to local defense production.

But, much of the commentary has been focused over what the new DPP will do for that perennial bridesmaid of indigenous manufacturing - the Micro, Small & Medium Enterprises (MSME).

This by itself is not unusual as in any industry, major companies tend to hog the limelight, but ignoring defence MSMEs is ironical due to two key reasons.

Firstly, the Dhirendra Singh Committee (the source of many of the good things in the new DPP) has noted that 80% of components, aggregates and assemblies of complex weapons systems and aircraft are manufactured by MSMEs.

Secondly, there are almost 6,000 MSMEs in the country staffing over 1.1 million employees that supply components and sub-assemblies to the defence PSUs, ordnance factories, DRDO and private firms.

Both factors show that the real backbone of Indian defence production has always been the MSME and will be for times to come and the new DPP would be a boon for MSMEs.

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